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  • China’s Coal Giant Moves to Build More Plants // Australia’s Coming Electricity Shortfalls // Wind Power Gets Price in New York State

China’s Coal Giant Moves to Build More Plants // Australia’s Coming Electricity Shortfalls // Wind Power Gets Price in New York State

Welcome Grid Brief! Here’s what we’re looking at today: China steams ahead with more coal capacity, Australia faces electricity shortfalls as its coal fleet retires, wind power drives up bills in New York state, and more.

China’s Coal Giant Moves to Build More Plants

China’s largest coal company is seizing the opportunity to build more coal plants before 2025 because the Chinese government has prioritized energy security following a slew of power shortages.

“China Shenhua Energy Co. has 11.75 gigawatts of coal and gas generation under construction and is reviewing previously postponed and suspended projects to see which can be revived under current conditions, General Manager Xu Mingjun said at a briefing on Friday,” reports Bloomberg. “The company is also renovating and expanding existing plants and expects to put the new projects into operation by 2025, he said.”

Since last year, China has approved 152 gigawatts of new coal plants—more than all the coal in the European Union combined. China sees coal as a way to back up wind and solar the same way America uses natural gas plants.

Australia’s Coming Electricity Shortfalls

Australia is facing electricity shortfalls in the next ten years as 62% of its coal fleet, which supplies most of its power, retires.

“Reliability risks are seen in Victoria from this summer and in New South Wales from 2025-2026, the Australian Energy Market Operator said Thursday in its Electricity Statement of Opportunities report,” reports Bloomberg. “Power demand is expected to continue growing along with the population and economy and it is critical that planned investments in transmission, generation and storage projects are ‘urgently delivered,’ it said.”

“While our central scenario shows increased reliability risk, it does not reflect the reliability potential from the 248 gigawatt pipeline of proposed generation and storage projects, actionable transmission projects and government energy programs underway,” AEMO Chief Executive Officer Daniel Westerman said.

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Wind Power Gets Price in New York State

Proposals to raise existing wind energy contracts in New York may increase residential power bills (2.5% for offshore, 1.5% for onshore) by $4.67 a month, according to the state’s Energy Research and Development Authority.

“However, failing to update the prices for wind and solar contracts could kill the projects, leading to delays in meeting state clean energy targets, increasing carbon dioxide emissions, and potentially higher prices for future contracts, the agency said in a Monday filing at the New York Public Service Commission,” reports Utility Dive.

Last Tuesday, one of the petitioners, Orsted, said it faces about $2.35 billion in value reductions on its U.S. offshore wind portfolio due to supply chain snags, possible rejection for additional federal investment tax credits, and higher interest rates.

Offshore wind is now becoming about as expensive as the infamous Vogtle nuclear units 3 and 4 in Georgia, though with less capacity factor and without dispatchable reliable power.

Conversation Starters

  • America inks a longterm LNG deal with Europe. “Commonwealth LNG has entered into a Heads of Agreement (HOA) with MET Group, an integrated European energy company headquartered in Switzerland, for the sale and purchase of 1 million tonnes per annum (Mtpa) of liquefied natural gas (LNG) for 20 years from the Commonwealth LNG facility currently under development in Cameron, Louisiana,” reads a press release. “MET Group is actively increasing its participation in the LNG market. In 2022 alone, MET has imported more than 30 terawatt-hours (TWh) of LNG cargoes to countries including Croatia, Greece, Spain, Belgium and UK. This year, the company also secured long-term LNG capacities in Germany and expanded its spot capacity reach to Finland.”

  • Arctic drilling for Europe. “Eni's Norwegian subsidiary Vaar Energi said on Thursday it would ramp up exploration in the Arctic Barents Sea to increase its oil and gas production in the region,” reports Reuters. “Plans by oil companies to explore in the Barents Sea have been criticized by environmentalists, who say it runs contrary to Norway's international commitments to reduce greenhouse gas emissions.

    The country's Supreme Court, however, rejected a motion to stop Arctic drilling in 2020.”

  • Australian LNG unions enter mediation to avert strike. “Chevron Australia and unions representing workers at two of the U.S. energy major's liquefied natural gas (LNG) facilities in Australia began talks on Monday aimed at averting strikes scheduled for Thursday should the parties fail to reach a deal,” reports Reuters. “A senior member of the Fair Work Commission (FWC), Australia's industrial umpire, is hosting talks in the Western Australia state capital of Perth every day this week, as first reported by Reuters on Friday.”

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